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COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(September 24, 1997) CORN: Relatively tight stocks are encouraging short-covering below 260 thus far. Talk of rain, which would hinder the harvest was supportive. South Korea was a purchaser of U.S. corn.
RESISTANCE–Resistance basis December is near 264, 266-268, 272-274, 278-280, near 286, 289-290 and 295.
SUPPORT–Support remains near 262(current levels), 258, 252-255. RECOMMENDATION–The potential for a harvest induced break into the 250's basis December remains a strong possibility. Taking out 260½ signals a resumption of the downmove, and possibly a decline to the gap at 237½-240. December corn may continue to run into problems in the upper 260's. Aggressive traders might sell 262-264 with stops over 268 or 274, looking for the mid 250's, possibly lower. Aggressive traders might buy below 260, but if conservative, wait for signs of bottoming, as a move to the 240's appears possible basis the charts. Option traders might buy March or May calls on weakness for the long haul. May 280 calls are cheap. Experienced option traders might buy March or May calls and sell December calls for the time premium.
M. Steven Morgan
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